STRONGBRANDS    Professor Tim Calkins, Kellogg School of Management

Four big brands are in the news today with new partnerships.

EBay is teaming up with Sotheby’s to sell art online. The two companies will sell eighteen different types of items with internet bidding.

Pizza Hut is working with Hershey’s to build its dessert business. The pizza giant announced today that it will start selling the “Ultimate Hershey’s Chocolate Chip Cookie.” It is a huge item (8 inches in diameter) that you slice up like a pizza.

Does it make sense for brands to partner up like this?

In many cases it does.

Great brands stand for something; a strong brand comes with a distinct set of associations. BMW stands for performance, German engineering and the driving experience. Patek stands for tradition, understated elegance and exclusivity. Wal-Mart stands for low prices and great value.

Brands that lack clear associations often struggle. It is rarely enough to be a good brand; you have to be different and special.

As a result, there are many things a brand can’t do. BMW shouldn’t introduce a bicycle or a paper shredder. Patek shouldn’t come out with a cheap watch or a hamburger. Wal-Mart shouldn’t sell custom clothing or luxury vacations.

By partnering, brands can capitalize on their strengths and address their weaknesses.

Pizza Hut makes a good pizza. The brand isn’t known for its great desserts. A Pizza Hut cookie doesn’t make a lot of sense. Would it taste like a pizza? Hershey’s is known for excellence in chocolate. A Hershey’s cookie sounds delicious.

EBay has enormous reach and technical capabilities. It is hard to think of anyone better equipped to run an on-line auction. But EBay doesn’t stand for trust. When I buy something on EBay, I’m never certain if I will get the real thing or a fake. Sotheby’s stands for insight and credibility. If I buy art from Sotheby’s, I am confident that it won’t be a knock-off.

Both of these brand combinations make enormous sense.

There is risk, of course. Brands have to be careful who they partner with, because the partner’s brand image will rub off. Brand perceptions could suffer if the partner executes poorly.

Hershey, for example, is trusting that Pizza Hut can actually make and serve a delicious cookie. Sotheby’s is counting on EBay to block fakes.

A brand partnership should include clear performance expectations. There also should be rules for separation. Partnerships rarely continue forever and you want it to end on good terms.

With thoughtful execution, however, great brands can benefit from working together.

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